Real Estate Information

Did you know that if you are a first time buyer (or anyone who hasn't had a mortgage in the past 3 years) you can buy a house now and get your tax credit now? 

Here's how it works...Eligible homebuyers who purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occured on December 31, 2008.  That being said you can claim the credit in your 2008 tax return. 

You have several filing options:

1. If you close escrow between January 1, 2009 and April 15, 2009 you can claim the $8000 credit on your 2008 return that is due April 15th. 
2. You can extend your 2008 income tax filing until as late as October 15, 2009. (The IRS grants automatic extensions, but you must file for the extension.) See IRS.gov for instructions.
3. If you have already filed your 2009 return, you can file an amended 2008 tax return on form 1040X which is available at IRS.gov or through your tax providor.
4. Or you can just wait until you file your 2009 return, but why would you if you can get the money now and use it to fix up your new house.

The best part is that you don't have to pay the money back unless you sell the property before you have lived there for 3 years.  (Some exclusion apply to this as well.)

What are you waiting for???? Phenomenal prices, great selection, FHA mortgages with only 3.5% down, historically low interest rates and $8000 in tax credit.  It doesn't get much better than this.

The Making Home Affordable Plan is part of President Obama’s plan and is projected to help up to 9 million families restructure or refinance their mortgages to avoid foreclosure. 

2 of the Key Components:

1. Refinancing for up to 5 million families unable to refi because of falling home values.
2. $75 billion in incentives to loan servicers to provide loan modifications for an additional 4 million home owners.

Only conforming loans owned or securizited by Fannie Mae and Freddie Mac, this would include most conventional loans.  FHA and VA loans are currently not part of this program as they are being modified under other programs. 

How do you know if your loan if owned by Fannie or Freddie?  You can use the following numbers/websites to verify.

Fannie Mae:  1-800-7Fannie or www.fanniemae.com/homeaffordable

Freddie Mac:  1-800-Freddie or  www.freddiemac.com/avoidforeclosure

Criteria For Refinance

1. Property must be owner occupied.
2. Borrower must have sufficient income to support the new mortgage debt.
3. First mortgage cannot exceed 105% of the current market value of the property. (For example, if the property is worth $200,000, the borrower must owe $210,000 or less. 
4. If there is a second the borrower may still qualify if the first does not exceed the 105% and the second lien holders agree to subordinate to the new first mortgage.
5. No cash outs are allowed.
6. Borrowers cannot be delinquent on their mortgage.

Modification Criteria

1. Owner occupant in a one to four unit property.
2. Unpaid principal balance for one unit property cannot exceed $729,750 (higher for mulitiple units.)
3. Loan was taken out before January 1, 2009
4. A mortgage payment (including taxes, insurance, and HOA dues) that is more than 31% of the borrower’s gross monthly income.
5. Borrower must have experienced a significant change in income or expenses to the point where the current mortgage is no longer affordable.

These plans will not help borrowers who CAN make their payments but whose current property value is now less than what they owe.  The plan is to help those that are having problems making their payments in order to help them avoid foreclosures and therefore stabilize housing prices with less foreclosed properties.

If you would like more information on these programs please call me or visit http://www.financialstability.gov/

On December 16, 2008 the IRS announced that is now offering an expedited process for homeowners to avoid having a federal tax lien block the refinancing or sale of a home.  The IRS does not want to be a barrier to people trying to save their homes or to those that are selling them for less than the mortgage lien under certain circumstances.

Taxpayers and their representatives may apply for a certificate of discharge of a tax lien.  For more information and links to the IRS forms needed to make these requests please use this link - http://www.irs.gov/newsroom/article/0,,id=201343,00.html

Start the process early in your transaction so the IRS lien doesn’t become a closing issue.

It is what it is.  That is a saying that I find myself saying numerous times everyday.  The market is what the market is.  My goal is to bring my clients the facts and help them make the best decisions possible given the market facts we are facing. 

Here is what January 2009 looks like for single family home sales in the Sparks-Spanish Springs market.

In January 2009, the sales of bank owned and short sale single family homes in the Sparks-Spanish Springs area was nearly 90%.  66.2% were bank owned foreclosures and 22.5% were short sales.  The median sales price for this area was $202,500 which is down 20.6% from January 2008 when the median was $255,000.  This clearly shows the most motivated sellers, typically the banks and homeowners selling short to avoid foreclosure, are leading the market.  Traditional sellers only accounted for 10% of the month's sales which shows that many who don't need to sell aren't.

On the upside we sold 35% more homes this January than last January, which can most definitely be attributed to lower prices and great interest rates which have significantly boosted affordability.

There are currently 956 active or active-pending listings of single family homes in the Sparks-Spanish Springs area.  Of these 282 are bank owned or HUD foreclosures.  340 of these listings are short sales. 

Let's break the January sales down by area....

Sparks (Downtown Sparks area)- Median sales price in January was $143,625.  The list to sales price ratio for homes sold was 90%.  This area accounted for 17.5% of the sales in the Sparks-Spanish Springs area in January.

East Sparks (Wabash Circle/Mendive area) - Median sales price in January was $158,500.  The list to sales price ratio for homes sold was 96.9%.  This area accounted for 15% of the sales in the Sparks-Spanish Springs area in January.

Sparks Suburban (The Vistas) - Median sales price in January was $237,450.  The list to sales price ratio for homes sold was 97.8%.  This area accounted for 22.5% of the sales in the Sparks-Spanish Springs area in January.

South Spanish Springs (Wingfield & Cimmaron) - Median sales price in January was $235,900.  The list to sales price ratio for homes sold was 92.6%.  This area accounted for 18.7% of the sales in the Sparks-Spanish Springs area in January.

West Spanish Springs (Eagle Canyon) - Median sales price in January was $199,900.  The list to sales price ratio for homes sold was 98.5%.  This area accounted for 16.2% of the sales in the Sparks-Spanish Springs area in January.

East Spanish Springs (Bridle Path) - Median sales price in January was $389,950.  The list to sales price ratio for homes sold was 92.6%.  This area accounted for 2.5% of the sales in the Sparks-Spanish Springs area in January.

Sparks Foothills (D'Andrea) - Median sales price in January was $207,500.  The list to sales price ratio for homes sold was 99.6%.  This area accounted for 7.5% of the sales in the Sparks-Spanish Springs area in January.

Looking on the bright side - sales are up and affordibility is up.

The Reno-Sparks market saw more families become homeowners in December over the previous month and the general concensus is that we will see a strong January as well.  Many agents are seeing more buyer activity this January than they have experienced in the past. 

Bank owned sales and short sales continue to drive the market.  This has led to a fairly significant decline in the median sales price.  In December 2007 the median sales price in the Reno-Sparks area was $283,900 and this year it is $218,900.  Looking for a bright side 21% more homes were sold this year verses last year in December.

Interest rates, declining prices and a large selection have really created some amazing opportunities for buyers.  Still many are still waiting in anticipation of the market bottom.  I just hope they don't blink and miss it. 

Buyers did you know that about 50% of the homes on the market in , Nevada are either bank owned foreclosures (REOs) or short sales (pre-foreclosures)? Probably not, but as of today, September 26, 2008 here is what the landscape looks like for buyers in .  Out of 728 stick built homes - 140 are bank owned, 7 are subject to court approval before purchase, 4 are relocation company properties, 213 are short sales and 364 are traditional sellers. 

What does that mean to you as a buyer in this market?  You may have to rethink your strategies.

Bank Owned - If you are looking at bank owned properties, be prepared to be in a competitive situation if the property has just come on the market and is priced at or below market value for the neighborhood.  You will most  likely get into a multiple offer situation and may end up having to offer over asking price.  If the property has been on the market for an extended period of time you might be able to negotiate a better price than what is being asked for.  Be sure to discuss each individual property's situation with your buyer's agent.  Important Tip:  If you are considering purchasing a bank owned property BE SURE TO HAVE YOUR OWN AGENT.  You want to make sure that you are equally represented in these sales.

Short Sales - Are you a patient person?  If not, you may not want to attempt to purchase a short sale in this market.  In a short sale the seller has to secure approval from their lender to accept less than is owed on the property.  Due to the large number of homeowners attempting to due short sales the banks are simply overwhelmed.  They cannot process the requests in a timely manner.  What does this mean to you the buyer"?  You had better be ready to wait months for an answer, not days or weeks.  Short sales are very tricky.  Make sure you are working with and experienced buyer's agent to help you navigate this type of purchase.

With so many short sales and bank owned properties on the market you would think that every agent you might consider working with is qualified to represent you in one of these transactions - maybe not.  Be sure to ask your agent if they have represented buyers in REO and short sale purchases. 

Many of you are hearing that mortgage giants Fannie Mae and Freddie Mac were taken over by the federal government over the weekend.  It is still a little early to know what the full impact of this action will be.

Here is a very imformative article that will give you more information about this and what it might mean for the real estate industry.

www.dsnews.com/view_story.cfm

Sales of single family homes in the and Spanish Springs areas dropped 17.3% in August as compared to July this year.  But when compared to August of 2007 the drop is only 6.5%.  The median home price in and Spanish Springs for August 2008 was $227,650, which is down from $291,500 in 2007.  The average number of days homes are on the market was 133 this year compared to 106 last year.

Let's take a look at how each area is doing...

Spanish Springs East (Bridle Path etc.) accounted for 6.9% of the area's sales.  Sold prices ranged from $365,000 to $650,000 with a median price of $413,950.  Homes in this area were on the market an average of 172 days.

Spanish Springs South (Wingfield Springs & Cimmaron) accounted for 12.7% of the area's sales.  Sold prices ranged from $215,000 to $415,000 with a median price of $300,000.  Homes in this area were on the market an average of 132 days.

Spanish Springs West accounted for 13.9% of the area's sales.  Sold prices ranged from $157,000 to $540,000 with a median price of $229,000.  Homes in this area were on the market an average of 133 days.

accounted for 13.9% of the area's sales.  Sold prices ranged from $118,900 to $199,900 with a median price of $161,000.  Homes in this area were on the market an average of 91 days.

East accounted for 27.9% of the area's sales.  Sold prices ranged from $145,000 to $540,000 with a median price of $208,500.  Homes in this area were on the market an average of 147 days.

Foothills (D'Andrea) accounted for 9.3% of the area's sales.  Sold prices ranged from $197,000 to $390,000 with a median price of $231,500.  Homes in this area were on the market an average of 127 days.

Suburban (The Vistas & Kiley Ranch) accounted for 16.2% of the area's sales.  Sold prices ranged from $215,000 to $333,000 with a median price of $280,500.  Homes in this area were on the market an average of 131 days.

The East area and the Spanish Springs West area had the highest number of short sale and bank owned closings in August.  East accounted for 29.7% of the short sale and bank owned sales, and Spanish Springs West accounted for 23.4% of the short sale and bankowned sales.

Data taken from the NNRMLS as of 9/2/08.

Today the President signed into law HR 3221 otherwise known as "Housing and Economic Recovery Act of 2008".  This legislation has gotten a lot of press coverage and interest.  There are thousands of articles being written about it on the Internet.  I have people asking me, "Is this going to help the real estate market?"  My answer is it's a little to early to tell, but there are definitely some positives in this legislation.

Here are the key highlights of the legislation:

• Reform for Freddie Mac and Fannie Mae in the form of more oversight and permanent caps on loan limits for conventional loans.
• FHA Reform.  FHA loans have become the loan of choice in our market as they currently only require 3% down.  Changes that we are expecting to take place are loan limit changes, increase in down payment to 3.5% and modernization or streamlining of the FHA loan process.
• Homebuyer Tax Credit - a $7,500 tax credit that would be available for qualified purchases between April 8,2008 and June 30,2009.  The credit is repayable over 15 years, effectively making it an interest free loan.
• FHA Foreclosure Rescue - The is a refinance program that is supposed to help homeowners avoid foreclosure.  It involves the mortgage holder agreeing to writing down the homeowner's loan so that they can refinance into  an FHA 30 year fixed rate.  The homeowner would have to share 50% of any future appreciation with FHA.
• Seller Funded Down Payment Assistance Programs - These programs will be prohibited by FHA beginning October 1, 2008.  Commonly known as Nehemiah or Ameridream.  This does not affect assistance programs such as Nevada Housing or Nevada Rural Housing Bond Programs.
• VA Loan Limits - Temporarily increases in the VA home loan guarantee limits.

These are just a few of the provisions of this new legislation.  Over the next couple months we will get more details on how this is going to affect loan programs etc.  If you have specific questions please contact me and I can help you with those. 

Most buyers would not consider offering full price much less above full price given their perception of the current market conditions.  But here are the facts  In the /Spanish Springs area so far this month 35.4% of the homes sold for prices above asking price and another 25.8% of homes sold at asking price.  That’s a total of 61.2% of the homes sold so far this month selling at or above the seller’s asking price.  Overall the homes that have sold this month sold at an average of 99.1% of asking price with an average list price of $275,674 and an average sales price of $273,280. 

Why are sellers getting their asking price or above? Competitive pricing. 60% of the sellers that got their asking price or above were bank owned properties.  This is due to the fact that most banks are having several appraisals or broker price opinions done prior to listing the property and then pricing them competitively.  In many cases these properties are getting multiple offers if they are very competitively priced.  So if you are considering submitting a “low ball” offer on a competitively priced home you should be prepared to possibly loose out to another buyer.  Ask your agent to do a competitive market analysis of the property you are considering so that you can make a strong offer based on the market value.

So what are homes in /Spanish Springs selling for?Here are how the prices break down for homes sold this month:

• Under $200,000 - 26%
• $200,000 - $250,000 - 26%
• $250,000 - $300,000 - 13%
• $300,000 - $350,000 - 13%
• $350,000 - $400,000 - 16%
• $400,000 - $450,000 - 0
• $450,000 - $500,000 - 3%
• Over $500,000 - 3%

So far this month 54.8% of the sales were bank owned and 16.1% were short sales.  The average sold price per square foot was $135/sqft. with an average 116 days on the market.